Sysco Corp. SYY markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry.
Sysco has been consistently showing improvement in sales driven by acquisitions and volume growth. Though the termination of the long-awaited merger agreement with US Foods in June was disappointing, the company still remains positive on the acquisition front and expects to move forward with more such deals. However, currency headwinds and declining gross margin remains a concern for Sysco. Nevertheless, Sysco’s growth strategy remains strong and its efforts to accelerate sales, reduce costs and mitigate the ongoing gross margin pressure are encouraging.
Investors should also note the recent earnings estimate revisions for SYY, as the consensus estimate has been declining. Further, SYY has delivered in-line earnings in two of the last four quarters, positive surprise in one and negative surprise in the remaining one; thus delivering an average positive surprise of 0.39%.
Currently, SYY has a Zacks Rank #3 (Hold), but that could definitely change following Sysco’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: SYY’s earnings of 52 cents were in-line with our consensus estimate of 52 cents. Investors should note that these figures take out stock option expenses.
Revenue: SYY’s revenues of $12.6 billion slightly beat the consensus estimate of $12.5 billion.
Key Stats to Note: Sysco sales grew marginally on a year-over-year basis. Gross margin performance also improved in the first quarter, despite a challenging deflationary environment.
Stock Price: In-active in pre-market trading.
Check back later for our full write up on this SYY earnings report later!
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